2006 Vauxhall Astra engine - garage say driven low on oil

I purchased a Vauxhall Astra Life '06 plate in April 2011 - in December in went in for its Service and MOT with the garage we purchased it with. The Vehicle Health Check form stated "ENGINE OIL LEAK FROM SUMP GASKET" and my partner was told at the time that we would need to book the car back in as they felt it hadn't been driven with enough oil and further damage may have manifested itself in the engine, which they needed to look into. The day after the car broke down. After calling out the AA it came to light it was the battery however I raised my concerns with the garage regarding the oil issue and we dropped the car back to them to look into. The advised us that it looked as though it could be the oil pump but would need to strip the engine down to see whether there was a fault with it or if it was our fault for not topping up the oil. The car was booked in yesterday and the garaged called me to advise (summary of the call):

"Possibly a problem with the cylinder bores, whether it be the piston rings or the bores themselves they won’t know until they start stripping it down. Been cheeky and told the Warranty that it need piston rings and they have agreed to pay for the rings and labour only but won’t pay for the timing belt, the head gasket, the camp cover gasket or anything like that - leaves a balance of £587.28 + VAT = £616.64 if it is the piston rings.
Obviously if they got it open and see it is the bores it will need a new engine then they will be back in discussion with the warranty company/further cost. It looks like where is has been run low on oil it’s not lubricated the piston rings which in turn have heated up and then distorted. So it’s not creating a nice seal on the piston so it is lifting the oil up and then pushing it back down so it isn’t getting the oil to the top of the engine to lubricate everything.
The oil pump is noisy but they suspect this is just because it was low on oil. First port of call is get the piston rings put it in rebuild the engine and test it and check the compression on the bores which clarify if they have resolved the problem and it the oil pump is running up to its maximum."
I was concerned that if I agreed to go ahead I would land up with a bill for £1000+ when I honestly believe this is not our error, so I emailed the garage this:
"Thanks for your call this morning. Obviously it wasn't really the news we were hoping for as I still fail to see how that much damage can be caused due to low oil and it be our fault, when we have topped it up twice and only got the car in April. Yes, I understand it was low when it came in for service but surely that is because the engine is just burning oil? We have topped up the oil in line with the manufactures guidelines and therefore there must be another reason why it is burning oil as excessively as it is?
What I need to understand before I agree to pay for anything is what is actually wrong and how long it has been in existence as I am concerned that there could have been an underlying fault present when we brought the car and it has just jus got worse whilst in our possession. I am also concerned that the oil light has never come on yet all the damage is because of the oil?

Can you please respond listing all the faults and the reason, and what parts are required to complete the repair. I do appreciate that you are trying to help us but I need to be sure we don't end up paying for something that isn't a result of our actions and should therefore be covered."

They responded:

"The engine can use up to one litre of oil pre 1000 miles, and the oil light is a pressure related warning system; this light will not come on for the oil level being low. We can only speculate that the piston rings are faulty till a strip down of the engine has been carried out, but due to the compression readings on the car we are pretty confidant that this is the cause of the issue. The damage itself is not that big an issue but the cost of repair is mainly affected by the amount of items required for removal to gain access to the piston rings. If we are correct on the diagnostics then you would receive a bill of £616.64 Inc vat If as discussed on the phone we found further issues on strip down I would halt the work till we had talked to each other and discussed what we would
do next.

The list of parts required is listed below.
3x nuts £7.71
3x studs £3.24
1x gasket £2.01
11x bolts £4.73
11x bolts £2.75
1x cover gasket £131.00
1 x sealant £9.70
8 x rod bolts £4.80
3x coolant £11.13
4.50ltrs oil £47.24
1 x o-ring £.24
1x filter £3.62
1x t/belt kit £105.00
10 x screws £31.90
1 x head set £99.00
Plus 1 head skim £51.00

All prices are plus vat. I hope this helps towards your decision "

I then advised them:

"Thanks Graham. I'm just stressed because it's a lot of money that I am not sure we even have yet and still can't help feeling we should be covered for more than we are - but not knowing much about cars its hard to understand. I have been advised today however that our car has an oil pressure sensor & a oil level sensor in the sump. So surely the light should have come if cylinder 2 was only 55 upon a compression test?

If I am barking up the wrong tree and your mechanic is adamant that all the damage is due to us not putting enough oil in then I guess there isn't much we can do about it but I just have this gut feeling there is something else wrong.

Thanks again for your help."

To which they never replied, then this afternoon the chased me up for the go ahead to strip down so I reiterated my email yesterday and they said that until they strip it down the engine they are unable to check any further. I advised them to go ahead but not to do anything else until they make me aware of their findings. They replied:

"I will start to strip down for you and contact you on my findings as for the cost of parts I have asked the warranty company to try and cover some more items fingers crossed they will come up trumps"

Sorry this is so long but I am not car minded at all and can't help feeling we are being taken for a ride and that it should be covered under the warranty. When we brought the car it had done just over 71,000 miles we have done bout 3000 in it and topped it up twice so I really struggle to see how it is us?